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Crypto token Ether bounces back after SEC Ethereum probe claims
(Bloomberg) — The Ether token posted its best rise this week amid speculation that U.S. regulatory scrutiny of the blockchain ecosystem underlying the second-largest digital asset could loosen.
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The token rose as much as 3.6% on Wednesday before paring some of the advance to change hands at $3,562 at 12.53pm in Singapore. The rally was a modest boon for market leader Bitcoin and a number of smaller rivals.
Ether is the currency of the Ethereum blockchain, the most important network for cryptocurrency-based financial services. A U.S. Securities and Exchange Commission investigation into the Ethereum Foundation has highlighted uncertainty over whether Ether is an unregistered security, a status that could dent demand for the digital asset.
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“The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were based on ETH being a commodity, meant the agency would close the investigation into Ethereum 2.0,” Consensys added.
The SEC did not immediately respond to a request for comment on Consensys’ claims. The request was sent outside of normal business hours. Consensys sued the SEC in April in an attempt to push back against regulation of Ethereum.
The agency last month approved a proposal from venues run by Cboe Global Markets Inc., Nasdaq and the New York Stock Exchange to list exchange-traded funds that invest directly in Ether. More approvals are needed before applicants such as BlackRock Inc. and Fidelity Investments can launch such products.
Although Bitcoin is seen as a commodity, the SEC argues that most other tokens are unregistered securities that should be subject to its oversight.
But SEC Chairman Gary Gensler has been ambiguous about whether Ether is a security. Cryptocurrency enthusiasts are concerned that the token – and potentially projects based on the Ethereum blockchain – fall under the agency’s harsh and costly rules.
Bloomberg News reported in March that the agency had asked companies about their dealings with the Ethereum Foundation as part of a review of aspects of Ether. The foundation’s website describes the organization as a nonprofit dedicated to supporting Ethereum and related technologies.
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